Section 2: Applying the Theory (8 points) 1. Show these data graphically. 2. Upon what specific
assumptions is this production possibilities curve based? 3. If the economy is at point D , what is
the cost of one more capital good? 4. If the economy is at point D , what is the cost of one more
consumer good? 5. Explain how the production possibilities curve reflects the law of increasing
opportunity costs. 6. If this economy is producing 4 capital goods and 2 consumer goods, what
could you conclude about its use of its available resources? 7. If this economy is planning to
produce 4 capital goods and 9 consumer goods, would they succeed in their plan? why? 8. If
there is a technological advancement only in the production of capital goods, how would this
change the shape of the PPF? (show on graph).
Section 2- Applying the Theory (8 points) 1- Show these data graphical.pdf
1. Section 2: Applying the Theory (8 points) 1. Show these data graphically. 2. Upon what specific
assumptions is this production possibilities curve based? 3. If the economy is at point D , what is
the cost of one more capital good? 4. If the economy is at point D , what is the cost of one more
consumer good? 5. Explain how the production possibilities curve reflects the law of increasing
opportunity costs. 6. If this economy is producing 4 capital goods and 2 consumer goods, what
could you conclude about its use of its available resources? 7. If this economy is planning to
produce 4 capital goods and 9 consumer goods, would they succeed in their plan? why? 8. If
there is a technological advancement only in the production of capital goods, how would this
change the shape of the PPF? (show on graph)
